Difference between Top-up and Super Top-up Plans

Top-up and super top-up plans are two unique options to health insurance policy holders to enhance their existing sum assured. With rising inflation often actual medical expenses far exceed the existing health cover. Now with these two options available in the market, you get an advantage to meet these extra health care expenses. Top-up and super top up plans work with a similar aim- to provide a health cover more than your regular health plan. These plans are add-ons that could be purchased over and above your basic health cover. What sets them apart then? Have a look under these factors.

Deductible and Threshold limit

Top-up and Super top-up plans work around what is known as a deductible or threshold limit. This deductible is a pre-determined amount, and a claim under top-up/super top up would be entertained only if the expenses are over and above this amount. So typically your top-up/super top up plan would pay you the benefits only if your expenses have crossed the deductible limit. Any claims below the threshold amount would not fall under the scope of top/super-to up plans.

The characteristic difference between the two options lies here.

The Scope

A top up plan reimburses medical expenses for a single illness. In other words, the expenses for a single injury or disease should be over the threshold limit to be eligible for a claim. In a super-top-up plan, the deductible is applicable for an entire year. It takes into account the total of the bills in a year and not just the single instance. So all bills put together in a single year should be over the threshold limit.

The Working

To understand the difference, it is best to look at a simple illustration. Let us consider a health insurance policy with a basic sum assured of Rs. 2 lakhs. Your options are:

Option Top-up: A top up policy of Rs. 8 lakhs. The deductible or threshold limit is fixed at Rs. 2 lakhs.

Option Super top-up: You opt for a super top up policy of Rs. 8 lakhs with a deductible at Rs. 2 lakhs.

Take the case of three different claim scenarios.

Scenario 1: A single hospitalisation expense of 5 lakhs

Option Top-up: The base health would provide cover as per its terms for Rs. 2 lakhs. The top up plan kicks in once the bills exceed the threshold limit of Rs. 2 Lakhs and the balance amount of Rs. 3 lakhs would be paid by it.

Option Super top-up: The same procedure would be followed here too, with the super top up kicking in after Rs. 2 lakhs and then covering the balance Rs. 3 lakhs.

Scenario 2: Two claims in a single year; hospitalisation expense of Rs. 1 lakh followed by another of Rs. 2 lakhs for further treatment of ailment.

Option Top-up: The regular policy would provide cover for Rs. 1 lakh in the first claim as it is well within its scope with no requirement of top up kicking in. In the second claim of Rs. 2 lakhs, the regular health plan would provide cover for Rs. 1 lakh as cover limit for the year is up to Rs. 2 lakhs. The balance amount of Rs. 1 lakh here would turn out to be an out of pocket expense. This is because expenses for the single incidence of treatment haven’t crossed the threshold limit, so the top up would not kick in.

Scenario 1: Rs. 5 lakhs

Scenario 2: Rs. 1 lakh & Rs. 2 lakhs

Scenario 3: Rs. 4 lakhs and Rs. 2 lakhs

Regular Health Plan cover

Rs. 2 lakhs

Claim 1: Entire Rs. 1 Lakh.

Claim 2: Rs. 1 Lakh

Claim 1: Rs. 2 lakhs

Claim 2: Nil

Top up Option

Rs. 3 lakhs

Claim 1: Nil

Claim 2: Nil

Claim 1: Rs. 2 lakhs

Claim 2: Nil

Super Top up Option

Rs.3 lakhs

Claim 1: Nil

Claim 2: Rs. 1 lakhs

Claim 1: Rs. 2 lakhs

Claim 2: Rs. 2 lakhs

Super Top up handles this claim a bit differently. It considers the threshold limit in a year and not for a single instance. Similar to the above, the regular plan would cover Rs. 1 lakhs of the first claim and Rs, 1 lakh in the second claim. The balance of Rs. 1 lakhs would be paid by the super top up plan, as it considers the total of bills in a year, which is Rs. 3 lakhs, and the threshold limit has exceeded.

Scenario 3: Hospitalisation Expense of Rs. 4 lakhs followed by another 2 lakhs for treatment.

In this claim here is what you could expect.

Option Top up: The regular policy would provide cover for 2 lakhs. The balance above threshold limit of Rs 2 lakhs in the first claim would be covered by top up. The second claim would not be entertained, as the threshold limit in that instance was not crossed.

Super top up: Regular policy covers Rs. 2 lakhs of first claim. Balance Rs. 2 lakhs is taken care by super top up. In the second claim, super top up would entertain Rs. 2 lakhs as the threshold limit in the year has been crossed.

The Cost Factor

Considering the far more comprehensive cover provided, a super top up plan has a higher premium. Where a of Rs 10 lakh with a base amount of Rs 3 lakh could cost around Rs 2,500. Super Top up Medicare plan costs Rs 3,700 annually.

Typically suited for

For many, super top ups seem to be far more advantageous considering they would cover a range of ailments in a year. However, do bear in mind they are a far more expensive option. Top-ups may seem fine for those who are in their younger days where the incidence of ailments seems to be far lesser. For the elderly and senior citizens who have frequent medical expenses, super-top ups may prove to be a better option.